Debate over two budget-reform measures is creating sharp fissures in Colorado’s already divided Republican Party, pitting longtime allies against each other as the GOP seeks to retain the governor’s office in 2006.

U.S. Rep. Bob Beauprez and former University of Denver president Marc Holtzman oppose the referendums on the November ballot, hoping to appeal to conservative voters – considered key to either candidate winning the party’s gubernatorial nomination nine months later.

Their stances against budget reform place both men at odds with Gov. Bill Owens, business leaders and the measures’ powerful Republican backers. Especially intense is rhetoric being hurled against Owens by Holtzman, who accuses the governor, his one-time close friend, of selling out by promoting reform of the revenue-limiting Taxpayer’s Bill of Rights, or TABOR.

Warring over budget measures is distracting Republicans from what should be their main priority: the 2006 election, party leaders say.

“I’ll be happy when this is behind us this November,” said state Republican chairman Bob Martinez. “The 2006 election is much more significant to the future of the Republican Party and good governance in this state than these particular referendums.”

Adds software entrepreneur and party activist Ed McVaney: “The split is awful. It’s not a healthy thing for Republicans.”

Republican rifts began making headlines last year, when Owens infuriated conservatives by backing out of his pledge to support former Congressman Bob Schaffer for U.S. Senate and instead endorsed beer scion Pete Coors.

Coors won the party’s nomination but lost to Democrat Ken Salazar three months later.

Along with his defeat came Republicans’ loss of the 3rd Congressional District seat to Democrat John Salazar and the loss of both statehouse chambers to Democrats for the first time in 44 years.

Owens since has angered many in his party by asking voters this November to ease the restrictions of the 1992, voter-approved TABOR measure for five years.

Owens, oilman and GOP powerbroker Bruce Benson and Denver Metro Chamber of Commerce president Joe Blake are among the big-name Republicans who have joined with traditional opponents in the Democratic Party, organized labor and nonprofit circles in pushing passage of the budget measures.

Owens’ pact with Democrats on TABOR so irked some conservatives that, earlier this year, they posted broadsheets showing a doctored mug shot of the governor gagged with a handkerchief.

“MISSING,” it read. “Have you seen this man? … Posing as a fiscal conservative and also a tax-and-spend liberal (Victim is well-known schizophrenic).”

Holtzman’s and Beauprez’s opposition stems at least in part from the calculation that any Republican must appeal to the conservative base to win the August 2006 primary, those close to both campaigns say.

In doing so, some experts say, both candidates are gambling their political fates in the general election, and beyond.

“It’s a risky political calculation,” said Colorado State University political science professor John Straayer, a TABOR-reform supporter. “By playing to the most conservative elements in their party, they’re risking their own political fortunes, and also risking the future of the state.”

“The caucus system makes you hostage to those issues,” added Denver political consultant Maria Garcia Berry, who backs Beauprez but supports the reform measures.

“If C and D lose,” she warned, the state’s budget will be so strained that “both these guys are going to become real regretful that they became governor.”

Holtzman has come out swinging against the measures and against Owens, who appointed him state technology czar shortly after he moved to Colorado in 1998.

“The governor has lost his way on this issue. He has strayed from his own political and ideological roots,” said Holtzman, who has focused much of his high-dollar campaign courting conservatives, especially in Colorado Springs.

Beauprez has spoken against the measures since launching his campaign in April. His sharpest comments came when he said he was “increasingly concerned that Referendum C is to our budget problems what a chain saw would be to brain surgery – a blunt instrument for a delicate job.”

Republican budget-reform backers – many of whom support Beauprez for governor – urged the congressman to tone down his criticism. He generally has done so, prompting Holtzman and other C & D opponents to say he is kowtowing to the party’s big-monied, moderate elite.

“I would not want to be in a meeting where Bruce Benson is trying to fundraise both for Refs. C and D and for Bob Beauprez,” said Jon Caldara, the Independence Institute president who is leading the charge against budget reform.

Beauprez insists he hasn’t wavered. “Mark Holtzman has never cast a vote in his life. He has no record and is out there … on the attack personally against me and the governor, who was the guy who validated him politically when he came to Colorado,” he said.

Owens has endorsed Beauprez despite their differences on budget reform.

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